Smith & Nephew: “UFO” Alert

Now and again there is chatter regarding a perennial takeover target. The one in focus at the moment is Smith & Nephew. By rights the group should have allowed itself to be taken over years ago. But instead the management seems to have preferred to soldier on, attempting to extract shareholder value. Good luck with that.

One could describe the present position of the surgical devices group as it being something of an Unidentified Flying Object, with no real story or substance to the talk surrounding it.

That said, the daily chart appears very strong, a point witnessed by the April / May / June and July gaps to the upside. The latest recovery of the 50 day moving average at 1,353p is encouraging, with a weekly close above this number underpinning the idea that the next time the shares touch 1,400p they could keep going. This is on the basis that since April the appearance of the chart has been very constructive.

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